Vaccine Optimism and Strong Asian Data Overshadows Covid Fears
Chinese retail sales, Japan GDP, Asia trade deal
Retail sales in China rose at the fastest rate of the year in October, a strong sign that improving consumer demand is contributing to the economy’s solid economic recovery from the covid pandemic. Sales rose an impressive 4.3% MoM, well ahead of the 3.3% increase recorded in September. Retail sales returned to growth in August after 7 consecutive months of decline.
Adding to the upbeat mood data revealed that Japan’s economy rebounded sharply in Q3 with the economy growing by 5% QoQ, ahead of the 4.4% forecast, boosting the world’s third largest economy out of recession.
A trade deal agreed over the weekend also boosted optimism surrounding the covid economic recovery with 15 Asia-Pacific economies, including Japan and China agreeing to reduce futures tariffs.
Brexit will remain in focus this week, a crunch week for talks as both sides say that a breakthrough must be made in the coming days. The pound is pushing higher on optimism that a breakthrough could happen, particularly with the departure of Lee Cains and Dominic Cummings last week which could mean that Boris Johnson has more political space to compromise and secure a trade deal. Joe Biden wining the race to the White House could also motivate Boris Johnson & his team to secure a deal, although David Frost has warned that there may be on deal.
Oil advances ahead of OPEC +meeting
Oil is pushing higher as investors look ahead to the upcoming OPEC+ meeting on Tuesday, where producers are expected to support further extensions to supply cuts in order to offset the sharp decline in demand owing to covid infections.
The OPEC+ group had been reducing production by 7.7m barrels per day in order to underpin prices. The plan had been to increase production by 2 m barrels per day from January. However, this now looks unlikely. Crude oil trades +2.5% above $41.00
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